Oshawa housing to move into buyers’ market thanks to GM closure

In one fell swoop, General Motors Canada’s announcement on Nov. 25 that it plans to close all assembly operations in Oshawa, Ont. effectively has pushed housing there into a buyers’ market.

“The announced General Motors plant closure will certainly impact Oshawa, and the trickle-down effect will be felt across the province,” Christopher Alexander, executive vice-president and regional director, ReMax Integra of Ontario-Atlantic Region, told Homes Publishing.

“However, it’s important to remember that GM isn’t the economic driver that it used to be in Durham Region. The area boasts a growing education sector and a new casino is slated to open in 2019, which will boost new condo development and housing demand. With the rise of remote work and no relief expected for Toronto house prices in 2019, Oshawa will continue to be a popular choice with first-time and move-up buyers who have been priced out of the 416.”

There you have it, prospective home buyers.

Opportunity knocks

While such a major employment hit is hardly an occasion to celebrate, these developments could mean opportunity for those looking to buy a home.

“The fact is that more than 2,500 GM workers will be left in the lurch come 2020, and the looming loss of income will likely prompt a softening of the market at a local level, as existing residents and prospective homebuyers digest the news and what it might mean for them,” says Alexander. “This coming closure, coupled with further interest rate increases in 2019, is likely to trigger a market shift from the current balanced territory, as homebuyers delay purchases, scale down lower-priced properties or move away in search of employment.”

Another real estate expert, Don R. Campbell, says the impact of the closure could take 18 to 24 months to play out fully in the region.

Diversified economy

Thankfully, there is more going for Oshawa and the Durham Region than just General Motors. Though it was once described as the “Automotive Capital of Canada,” in recent years the economy has diversified into education and health sciences. The University of Ontario Institute of Technology, Durham College and Trent University Durham and all have campuses in the city, among other economy-boosting facilities.

Indeed, in its latest Metropolitan Outlook, the Conference Board of Canada pegged Oshawa to be one of the strongest economies in the province for 2018. The Board forecast real GDP growth of 2.6 per cent this year, following 3.2 per cent in the last two years, citing strength in the non-residential construction, education, health care, finance and insurance sectors.

In addition, Statistics Canada figures show that Oshawa was one of the fastest growing cities in Ontario from 2011 to 2016, with 6.6 per cent population growth, second only to Guelph at 7.7 per cent. This, after growing 7.7 per cent from 2006 to 2011.

Importantly, for prospective home buyers, transportation improvements such as expanded GO Transit and the Hwy. 407 extension make it easier for people to live in Oshawa – at cheaper home prices – and commute to work in other areas such as Toronto. Another extension of the 407 eastward to neighbouring Clarington is due for 2020, further easing transportation options.

New home opportunities

Tomorrow, we’ll explore some of the opportunities to buy new homes in the Durham Region.

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When you buy a new car, one of the last steps before you drive it off the lot involves the salesperson showing you all the features of your vehicle and how they work. It’s the same with a new home. Before you get the keys, you and your builder will do a Pre-Delivery Inspection or PDI. This is an important step – not only does it familiarize you with your new home but it also helps you protect your warranty rights.
The PDI usually takes place a week or two before closing and involves a formal walk-through of the finished home with your builder. During this inspection, any defects, missing or non-functional items need to be noted on a PDI form. This form serves as a record of the state of the home when it was turned over.
Keep in mind however that this is not a warranty form.

Once you take possession, any issues that your builder has not resolved from your PDI – or any new issues that you’ve identified in your first month of ownership – should be recorded on a 30-Day warranty form and submitted to Tarion.

By far, the most common defects we see reported on the 30-Day forms are what are called ‘fit and finish’ issues. That can include scratches or scuffs on cabinetry or floors, cracked millwork, poorly-applied paint or uneven floor tiles.
These are all issues that can – and should – be identified during the PDI. If for example, you report gouges in your hardwood on your 30-Day form but it wasn’t on your PDI form, it may be hard to prove that they existed before you moved in. So here are a few tips to help you with your PDI:

Open and close all windows to be sure the latches work, screens are in place and windows slide freely on their tracks.

Make sure all doors are painted and that their locks work properly.

Look at the walls in each room to make sure there are no nail pops or visible seams. Check out the baseboard and woodwork around the doors to see if there are gaps that still need to be filled with caulking. Do all the light switches work? You should be checking each one. Check outlets with a small lamp or nightlight.

Test for squeaky floors as you walk around.

Check the bathtubs and sinks to make sure there are no scratches or chips.

Take photos of missing or damaged items. These will help with any future warranty claims.

If there’s construction debris, tarps or other things obstructing your view of areas of the home, it should be recorded on the form that you weren’t able to inspect that particular area.

Take your time, take a good look at everything and don’t let yourself be rushed. This is the time when a builder should be explaining how the appliances work, where you’ll find the water cut-off and how to operate your home’s mechanical and HVAC systems. We recommend that builders spend about one hour per 1,000 square feet on the PDI.

While your PDI is an opportunity to document the state of your home before you move in, once you take possession, your one-year, two-year and seven year warranties kick in. This warranty coverage is outlined in your Homeowner Information Package – something that your builder should provide you with either at the time of your PDI or when you receive the keys to your new home.
If they don’t, you can download a copy from tarion.com. If you have questions about the PDI or how to get the issues you may identify resolved, you can contact Tarion at 1.877.9TARION or email customerservice@tarion.com and our customer service team will be happy to help.
Howard Bogach is president and CEO of the Tarion Warranty Corp.
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